Rethinking negotiations to achieve better outcomes

Negotiations are in vogue now globally and within the country: between the United States and a host of countries, including India, on tariffs, and also between India and other countries to successfully conclude Free Trade Agreements (FTAs). 

Apart from the above, negotiations at the corporate level are equally important. They find resonance in mergers and acquisitions (M&As), hiring of CEOs and other senior management leaders, performance appraisals between employees and the Human Resources Departments and within family businesses to arrive at amicable partitions.  

High-profile M&As in recent years include those of Reliance Industries group and Future Group, Tatas and Air India, Zomato and Blinkit, Tata Motors and Iveco and HDFC and HDFC Bank. EY India estimates that there was over US$ 26 billion in M&A deals in 2025. But the fact is that for every successful negotiation, there are far more failures. For example, the one between the Reliance and Future group, implementation was difficult and controversial. Today, quite often M&As in India are cross-border acquisitions where cultural differences complicate negotiations.  

Beyond M&As, trade unions and farmers have risen up to what they call the anti-worker and anti-farmer attitude of the government. Negotiations by both of them have stalled with the result that a Bharat Bandh was observed on Thursday, 12 February 2026. The rise of militant labour unions started with the Great Bombay Textile Strike of 1982, when over 50 textile mill workers went on strike under the leadership of Datta Samant. However, negotiations that went on for a whole year failed to yield an agreement. This was the beginning of the decline of powerful trade unions that, over time, have led to the growth of strong company managements dominating trade unions.   

Says Thomas Mathew, an HR leader with past experience in Bharti Airtel, Reliance Industries and NIIT and currently Director at Molethu PMC, “From my experience, identifying non-negotiable areas early is important, while being flexible on other aspects. It is equally important to acknowledge the other person’s point of view. I learnt very early in my career that negotiations are not really about roles or money. They are more about trust, respect, and the feeling of being treated fairly, which reflects an organisation’s culture over a period of time.” 

Adds New Delhi-based Independent Legal Counsel, Neha Sahai, “Reciprocity in terms of commitment and consistency towards the adherence of terms of agreement often lead to a positive environment. However, when these factors are missing, the negotiation process lands in utter disarray. In fact, many a time, negotiations become only an eye wash to demonstrate the beliefs that attempts at resolutions have been made, but the decisions would have been made behind closed doors. Often in high stakes deals, the parties come to the table with distrust and scepticism and that is where legal counsels and practitioners are needed to bridge the gaps.”

How to become a good negotiator

Negotiation is a significant part of leadership development, yet many companies fail to give it adequate attention. At a foundational level, the role of the HR department is critical. A simple attribute like high emotional quotient (EQ) on the part of both parties can lead to better outcomes. These include a calm and composed demeanour as well as detailed preparation before one walk into any such meeting. A well-rehearsed pitch with logical explanations and understanding of not just the law but also of the circumstances surrounding a negotiation are key to an effective and successful negotiation. Says Neha Sahai, “Negotiation is a skill, an art to be mastered and like all art forms, it needs polishing and practice. The key is to be able to handle emotions when the stakes are high as a composed conduct helps your emotional intelligence to yield the best results rather than lead you and the other party towards a deadlock.” 

The HR role involves negotiations most of the time. Says Thomas Mathew,” I have been part of an acquired company, and the transition from the earlier culture to the new organisation’s way of working was much more than negotiation. It required understanding different standpoints. As an HR professional, I had to continuously negotiate between our existing employees and the new management. The process went smoothly and resulted in a good and effective integration.”

Since senior-level hiring often involves hard negotiations, these are best handled through executive search firms.  In compensation negotiations with CXOs and business-impact role holders, positive outcomes without compromising the approved budget can be achieved by expanding the scope of the role, introducing deferred bonuses which could be managed, and improving variable pay structures when productivity and contributions became visible. In some cases, where compensation levels in India cannot be matched, expanding the role to include overseas business responsibilities, making it a win-win situation. 

Thomas Mathew sums up that during annual and compensation reviews, high employee expectations on pay are a regular feature. I believe that this is a good a good opportunity for HR to listen to more than what is formally communicated. Over time, based on the feedback, creating a clear framework and sharing it in advance will help reduce friction in negotiations.”